Closeup: Iran's hyped startup scene

I walked out of the Avatech office as bright late afternoon sun shone on the engineering campus at Tehran University. Stray cats were sniffing for leftovers beneath trees where students sat eating lunch.

The security guard at the university’s main entrance generally allows in women only if they strictly abide by dress codes - no shawls, only scarves; no short manteaux; no open-toed shoes. But tell them you are going to Avatech and you are let in without question.

Avatech is often described as Iran’s leading startup accelerator, which means it gives support and advice to fledging companies with a new business idea, especially in the tech sector. As such, Avatech has attracted the attention of theWall Street Journal, New Yorker, Washington Post and the Financial Times, among others.  The atmosphere at Avatech is different from the ones at Tehran offices of ten years ago where secretaries in dark clothes pored over paperwork. It has a vast open lounge where I overheard conversations in English about trips abroad or upcoming presentations. Energetic young people in colourful attire walked around with Starbucks mugs and MacBook Airs. Avatech’s first round of startups, beginning in October 2014, graduated the likes of Reyhoon (online food delivery), Navaar (audio books) andTaskulu (a project management platform). The second round, in progress when I visited in August and September 2015, had ten startups including a stock photo website, a cafe management app and an Iranian version of Etsy, which sells handmade products on its website. The groups were at their desks writing reports, discussing or coding, trying to build prototypes for ‘demo day’, when they would present their work to investors brought in by Avatech.

The ten had been chosen from 20 hopefuls to spend six months training and to receive minor funding in return for 15% of their shares. Avatech also takes on the cumbersome process of registering their business.

Avatech is funded by Sarava Pars. Sarava is one of many firms to launch an accelerator for startups in Tehran, leading some in the sector to speak of ‘accelerator fever’. Aside from Avatech, there is DMOND, affiliated with the Amidi Investment Group, TrigUp, affiliated with the leading technology company FANAP, and Setak, connected to Sharif University of Technology.

However Sarava is Iran’s most talked about venture capital firm. The story of its CEO, Said Rahmani, has come to symbolise the promise of the Iranian startup scene. Rahmani came home on a trip on behalf of Naspers, the South African internet and media group, but decided to stay and is said to have raised more than $10m from local investors. Sarava’s portfolio includes online retailerDigikala, ANetwork, an online advertising company, and Cafe Bazaar, Iran’s answer to the Google app store.